business plan blues

[KingCourt]

Here's the thing, I am buying a bar, everything is going great except that I can't figure out the sales vs cost profit, loss stuff. All of my numbers that I end up with, have me making a profit, which looks great, but I'm pretty sure that's not realistic and the bank it definately going to question it. Any ideas?

King's Court

[TheBarNation]

Hi Kings Court,

Great news that you're buying a bar, but you're going to have to provide a lot more info to us if you want useful feedback. Hard to tell exactly what you are having trouble with from your post.

Where are you getting your projections from?
How are you calculating your costs?
Do you have access to the last bar owners figures yet?
Are you benchmarking against any other bar locally or past experience?

Hopefully we can help further.

Barry

[KingCourt]

They won't show me their numbers, which doesn't matter to much because they were only open for 6 months.

So I have my start up inventory, but what I don't understand is how after projected sales, how much alcohol I will need to buy, I realize that I won't need as much after start up each month because I won't go through it all, but after projected sales and costs, I always show a profit, which is great but not realistic.

Is there a formula that I should know about to help with the numbers?

[TheBarNation]

To be honest there are a lot of formulas you need to work with to make this happen. If you haven't already done so I suggest you look through more of the threads on this forum relating to cost calculations. You'll get all the spreadsheets and calculators you need in our Top Shelf Club (http://www.budurl.com/topshelfclub) and I recommend you click on my signature image to attend Wednesday's free webinar all related to bar cost control.

Barry

[BarBoy]

WAIT a minute....

the seller won't show you their numbers....

and you THINK you are going to go to a bank for a loan for BAR that has been open for only 6 months?

My bar has been around for 14 YEARS under the same name and location and just a few years ago banks would extend a line of credit finally. You will NOT BE GETTING A BANK LOAN TO BUY A BAR!

Time to take some classes at your local junior college. Unless you have very deep pockets and a lot of industry experience, you are making a very very big mistake!

if the owner won't show you numbers, you are only buying out the lease and giving him some money for fixtures at a far reduced rate than what he paid! he can't ask you to pay top dollar for a business that is probably not anywhere near breaking even!

If he doesn't show you numbers and receipts, i'd walk. You NEEED to know how deep this place is in the hole before you take the plunge.

If he won't show you, he's trying to cut his losses and leave YOU holding the bag for the lease and debts. Don't be a sucka